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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
For financial reporting purposes, income before income taxes includes the following components:

Years Ended December 31,
(in millions)202220212020
United States$8.5 $12.8 $40.9 
Foreign(4.1)1.0 3.6 
Income before income taxes$4.4 $13.8 $44.5 
The provision (benefit) for income taxes consists of the following:

Years Ended December 31,
(in millions)202220212020
Current provision (benefit):
Federal$17.4 $(0.4)$(14.2)
State2.4 (0.7)2.3 
Foreign2.3 0.3 1.8 
Total current provision (benefit)
22.1 (0.8)(10.1)
Deferred (benefit) provision:
Federal(18.3)(0.1)12.3 
State(1.0)1.1 (1.4)
Foreign2.2 (2.3)(2.3)
Total deferred (benefit) provision
(17.1)(1.3)8.6 
Total provision (benefit):
Federal(0.9)(0.5)(1.9)
State1.4 0.4 0.9 
Foreign4.5 (2.0)(0.5)
Total income tax provision (benefit)
$5.0 $(2.1)$(1.5)

The Company's "Income tax provision (benefit)" is computed based on the domestic and foreign federal statutory rates and the average state statutory rates, net of related federal benefit.

The provision (benefit) for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before income taxes. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security ("CARES") Act was passed which modified the net operating loss ("NOL") carryback provisions allowing the Company to carryback its 2018 NOL to prior years. The tax provision for the year ended December 31, 2020 includes a $9.5 million tax benefit related to the NOL carryback which occurred due to a change in rates from 35% to 21%. A reconciliation of the provision (benefit) for income taxes at the statutory federal income tax rate to the amount provided is as follows:

Years Ended December 31,
(in millions)202220212020
Tax expense at the statutory federal income tax rate$0.9 $2.9 $9.3 
State income tax, net of federal income tax0.6 1.3 0.3 
Research and development tax credits(3.3)(4.1)(4.3)
FIN 48 impact1.2 1.8 4.0 
FIN 48 impact - liquidation of subsidiary— (0.7)— 
Change in foreign subsidiary net operating loss carryforward— 4.4 (0.3)
Valuation allowance impact6.0 (8.1)(1.0)
Changes in tax rates0.2 0.7 0.3 
Effects of Cares Act - 2018 NOL carryback— — (9.5)
Share-based compensation0.4 0.4 0.3 
Foreign-derived intangible income deduction(0.9)— — 
Other items(0.1)(0.7)(0.6)
Total income tax provision (benefit)$5.0 $(2.1)$(1.5)

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Significant components of the Company's deferred tax assets and liabilities are as follows:

December 31,
(in millions)20222021
Deferred tax assets:
Amortization of research and experimental expenditures$18.4 $— 
Inventory reserves4.7 3.7 
Warranty reserves2.2 2.0 
Credit loss reserves0.6 0.5 
State tax loss carryforwards11.6 11.9 
Accrued vacation1.6 1.4 
Deferred compensation1.1 1.4 
Share-based compensation4.4 2.0 
Goodwill1.8 2.0 
Foreign net operating loss7.2 4.4 
Lease obligation1.8 0.4 
Employee & insurance accruals1.0 0.8 
Domestic credit carryforwards1.5 1.5 
Deferred revenue1.7 1.3 
Deferred payroll tax - CARES Act— 1.1 
Valuation allowances(11.9)(5.9)
Other0.9 1.5 
Total deferred tax assets48.6 30.0 
Deferred tax liabilities:
Property and equipment13.6 13.0 
Intangibles2.7 1.1 
Right-of-use assets1.8 0.5 
Post-retirement benefits0.5 0.6 
Total deferred tax liabilities18.6 15.2 
Total net deferred assets$30.0 $14.8 

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and experimental ("R&E") expenditures immediately in the year incurred and requires taxpayers to instead capitalize and amortize such expenditures over a period of five years for U.S. activity and 15 years for foreign activity. Taxpayers cannot recover R&E costs before the end of the amortization period even if sold or abandoned. The Company has a deferred tax asset of $18.4 million for R&E expenditures as of December 31, 2022.

As of December 31, 2022, the Company had gross state NOL carryforwards of $227.8 million and gross foreign NOL carryforwards of approximately $23.8 million, which are available to offset future taxable income. If not used, these carryforwards will expire between 2023 and 2034. The Company does not have a federal net operating loss carryforward.

A significant portion of the valuation allowance for deferred tax assets relates to the future utilization of state and foreign net operating loss and state tax credit carryforwards. Future utilization of these net operating loss and state tax credit carryforwards is evaluated by the Company on a periodic basis, and the valuation allowance is adjusted accordingly. In 2022, the valuation allowance on these carryforwards increased by $6.0 million, of which $5.5 million relates to a valuation allowance on the deferred tax assets of the Company's Brazilian subsidiary as the NOLs are not expected to be fully utilized. The remaining change in valuation allowances is due to the unrealizable portion of certain entities’ state and foreign net operating loss carryforwards and certain other deferred tax assets in foreign jurisdictions.
The following table represents a rollforward of the deferred tax asset valuation allowance for the years ended December 31, 2022, 2021 and 2020:

Years Ended December 31,
(in millions)202220212020
Allowance balance, beginning of year$5.9 $14.0 $14.6 
Provision6.0 0.6 1.5 
Reversals— (8.1)(1.5)
Other— (0.6)(0.6)
Allowance balance, end of year$11.9 $5.9 $14.0 

Undistributed foreign earnings are considered to be indefinitely reinvested outside the U.S. as of December 31, 2022. Because those earnings are considered to be indefinitely reinvested, no deferred income taxes have been provided thereon. If the Company were to make a distribution of any portion of those earnings in the form of dividends or otherwise, any such amounts would be subject to withholding taxes payable to various foreign jurisdictions; however, the amounts would not be subject to any additional U.S. income tax. As of December 31, 2022, the cumulative amount of undistributed U.S. GAAP earnings for the Company's foreign subsidiaries was $57.7 million.

The Company files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. The Company is currently under examination for 2018 with taxing authorities in the United States. The Company is no longer subject to U.S. federal income tax examinations by authorities for years prior to 2014. With few exceptions, the Company is no longer subject to state and local or non-U.S. income tax examinations by authorities for years prior to 2018.

The Company has a liability for unrecognized tax benefits of $12.0 million and $10.8 million (excluding accrued interest and penalties) as of December 31, 2022 and 2021, respectively. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in tax expense. The Company did not recognize any tax benefits for interest and penalties related to amounts that were settled for less than previously accrued in 2022 or 2021. The net total amount of unrecognized tax benefits that, if recognized, would affect the Company’s effective tax rate is $13.7 million and $11.9 million at December 31, 2022 and 2021, respectively. The Company does not expect a significant increase or decrease to the total amount of unrecognized tax benefits within the next twelve months.

A reconciliation of the beginning and ending unrecognized tax benefits excluding interest and penalties is as follows:

Years Ended December 31,
(in millions)202220212020
Balance, beginning of year$10.8 $9.7 $5.7 
Additions for tax positions taken in current year1.2 1.0 0.5 
Additions for tax positions taken in prior period— 0.8 3.5 
Decreases related to sustained tax positions— (0.7)— 
Balance, end of year$12.0 $10.8 $9.7 

The tax positions in the December 31, 2022 balance of unrecognized tax benefits are expected to reverse through income in future years.